The Black-Scholes formula is notable because it does NOT require us to know:
A)the expected return on a stock.
B)the risk-free rate.
C)the volatility of the stock.
D)the dividend rate on the stock.
E)the stock price.

Question

Quizplus · Accepted Answer

The Black-Scholes formula does not require the expected return on a stock; it uses the risk-free rate, stock price, volatility, and time to expiration to price options.

The Black-Scholes Formula Is Notable Because It Does NOT Require